You materially participated in the operation of this business activity during the year, if you meet ANY of the following tests:
6. If you materially participate in a "personal service" activity (child care, consultant, real estate agent, etc.) for at least three years, you are a material participant for life.
7. Based on all the facts and circumstances, you participated in the activity on a regular, continuous, and substantial basis during the tax year (you must have participated for more than 100 hours during the year).
However, your participation in managing the activity does not count in determining whether you materially participated if anyone (other than you) received compensation for managing the activity or if anyone spent more hours during the tax year than you performing services in the management of the activity.
certainly, she would meet 6 so 7 wouldn't matter except I think Turbotax misphrases what the actual rule is.
the activity is a personal service activity and the individual participated in it for any 3 prior years consecutive or not. this would imply the need for material participation in the rental real estate activity. Temp Reg 1.469-5T
